The Confirmed Insanity of Austerity

[buckeye45_73]

By Alexander Reed Kelly

Austerity threw the 17 countries that use the euro back into recession in the third quarter of 2012. As a result, unemployment is expected to rise 12.2 percent, leaving half of young people in Spain and Greece without jobs, and public debts—the expressed target of the reductions—are growing as well.

Despite “unacceptably high levels of unemployment,” unelected President of the European Commission Jose Manuel Barroso recently said that “reform efforts [i.e., austerity] of member states are starting to bear fruit.” Exactly where that fruit is is not clear, especially to the 26 million Europeans who are out of work.

Paradoxically, a recent paper by economists Luc Eyraud and Anke Weber of the International Monetary Fund demonstrates that austerity and budget cuts intended to reduce debt levels will increase debt-to-GDP ratios in the short term. Another paper by economists Paul De Grauwe and Yuemei Ji finds that countries that embraced austerity most forcefully experienced the greatest declines in their GDP, and that greater austerity led to larger subsequent increases in the debt-to-GDP ratio.

Promoters of austerity have yet to say exactly how populations are supposed to recover when tens of millions of Europeans are unemployed and without the safety nets necessary to remain alive and well, and how national debts are supposed to be paid when those workers cannot contribute tax revenue.

More: The Confirmed Insanity of Austerity - Truthdig

The Insanity of Austerity » Counterpunch: Tells the Facts, Names the Names

The funny part is that Chavez reduced poverty with his "socialism" while Republicans and their cut everything austerity and lower taxes BS have produced nothing.

yeah SUUUUURE he did, did Chavez give you those figures? Wow that country is rockin!!!!!!!!!!!!

 

[buckeye45_73]

Most people without any economics background don't understand how it all really works.

BBC News - Reinhart, Rogoff... and Herndon: The student who caught out the profs

Grad Student Who Shook Global Austerity Movement -- Daily Intelligencer

which explains you....the min wage...exhibit A!

 

[Lakhota]

Most people without any economics background don't understand how it all really works.

BBC News - Reinhart, Rogoff... and Herndon: The student who caught out the profs

Grad Student Who Shook Global Austerity Movement -- Daily Intelligencer

which explains you....the min wage...exhibit A!

Really? Do you know me personally?

 

[Political Junky]

Most people without any economics background don't understand how it all really works.

BBC News - Reinhart, Rogoff... and Herndon: The student who caught out the profs

Grad Student Who Shook Global Austerity Movement -- Daily Intelligencer

Saw this covered on TV. Of course the right wing latched onto what Rogoff & Herndon wrote, but this young man has caused an uproar.

 

[Lakhota]

Most people without any economics background don't understand how it all really works.

BBC News - Reinhart, Rogoff... and Herndon: The student who caught out the profs

Grad Student Who Shook Global Austerity Movement -- Daily Intelligencer

Saw this covered on TV. Of course the right wing latched onto what Rogoff & Herndon wrote, but this young man has caused an uproar.

Yep, he's a sharp young man. I saw him on Colbert Tuesday evening.

 

[Lakhota]

10 Reasons Austerity Is a Crock

 

[buckeye45_73]

Which is why more people are in poverty in venezuela.

What is this world coming to when it's insane to live within ones means?

You should have told Bush that when he busted Clinton's balanced budget.

We did dumbass......

Not eveyone is a blind partisan like you....

http://www.washingtonmonthly.com/features/2007/0712.greenberg.html

Washington Monthly, December 2007

Title says it all

 

[Lakhota]

Reinhart And Rogoff's Pro-Austerity Research Now Even More Thoroughly Debunked By Studies

 

[Lakhota]

WASHINGTON -- Sen. Sheldon Whitehouse (D-R.I.) slammed a Heritage Foundation economist in an open Senate hearing Tuesday, suggesting the conservative number cruncher had offered cooked data on the impacts of austerity budgets.

European countries have lagged behind the United States in terms of economic recovery, and many analysts point to the effects of austerity programs as a reason.

Sheldon Whitehouse Slams Heritage Foundation Scholar For Bogus Testimony (VIDEO)

 

[TemplarKormac]

By Alexander Reed Kelly

Austerity threw the 17 countries that use the euro back into recession in the third quarter of 2012. As a result, unemployment is expected to rise 12.2 percent, leaving half of young people in Spain and Greece without jobs, and public debts—the expressed target of the reductions—are growing as well.

Despite “unacceptably high levels of unemployment,” unelected President of the European Commission Jose Manuel Barroso recently said that “reform efforts [i.e., austerity] of member states are starting to bear fruit.” Exactly where that fruit is is not clear, especially to the 26 million Europeans who are out of work.

Paradoxically, a recent paper by economists Luc Eyraud and Anke Weber of the International Monetary Fund demonstrates that austerity and budget cuts intended to reduce debt levels will increase debt-to-GDP ratios in the short term. Another paper by economists Paul De Grauwe and Yuemei Ji finds that countries that embraced austerity most forcefully experienced the greatest declines in their GDP, and that greater austerity led to larger subsequent increases in the debt-to-GDP ratio.

Promoters of austerity have yet to say exactly how populations are supposed to recover when tens of millions of Europeans are unemployed and without the safety nets necessary to remain alive and well, and how national debts are supposed to be paid when those workers cannot contribute tax revenue.

More: The Confirmed Insanity of Austerity - Truthdig

The Insanity of Austerity » Counterpunch: Tells the Facts, Names the Names

The confirmed (for the upteenth time) insanity of Lakhota.

So, if you are in debt, you would much rather spend more. I'm sorry, that's actually sad and masochistic all at the same time.

 

[Lakhota]

Household economics and government economics are two different things. They function differently.

 

[The2ndAmendment]

Lakhota:

Austerity is the inevitable result of socialism, because eventually everyone becomes so poor, that no one can pay for it. Even Bill Maher said he's leaving California.

 

[TemplarKormac]

Household economics and government economics are two different things. They function differently.

No they don't. How exactly can you prove that?

 

[Lakhota]

Household economics and government economics are two different things. They function differently.

No they don't. How exactly can you prove that?

Holy shit, do you really believe that? It ain't that simple...

 

[Lakhota]

It's difficult trying to communicate with people who don't know jack shit about economics.

 

[The2ndAmendment]

Household economics and government economics are two different things. They function differently.

You're right, households can't print money.

 

[TemplarKormac]

Household economics and government economics are two different things. They function differently.

No they don't. How exactly can you prove that?

Holy shit, do you really believe that?

Holy shit, why don't you?

 

[Lakhota]

The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?

The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.

So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.

This isn’t a new insight. The great American economist Irving Fisher explained it all the way back in 1933, summarizing what he called “debt deflation” with the pithy slogan “the more the debtors pay, the more they owe.” Recent events, above all the austerity death spiral in Europe, have dramatically illustrated the truth of Fisher’s insight.

And there’s a clear moral to this story: When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can’t or won’t. By all means, let’s balance our budget once the economy has recovered — but not now. The boom, not the slump, is the right time for austerity.

More: The Austerity Agenda - The New York Times

 

[Political Junky]

With interest rates so low, it's insanity not to build infrastructure.

 

[Lakhota]

With interest rates so low, it's insanity not to build infrastructure.

It's insanity for several reasons not to build infrastructure. Wingnuts have done nothing to help Obama create jobs. The House voted 37 times to repeal Obamacare - but not once on Obama's jobs bill (American Jobs Act).

The American Jobs Act - President Barack Obama's Jobs Plan